Property Frauds in Chennai

The moment a `patta' application for a piece of land in Adyar came to the Tahsildar's office in Mylapore, the officials realised the buyer had been cheated. The Revenue Department authorities lodged a complaint with the Central Crime Branch (CCB) police. The buyer, a businessman, had been led to believe that it was a `zameen' property being sold by legal heirs.

Cases in suburbs too

This is no isolated incident. Police say there has been a significant increase in the number of cases relating to the use of forged documents to sell either Government or private land in the city and its suburbs.

Crime Branch records showed that eight cases were registered in 2003. In 2004, the number rose to 11. In 2005, the CCB registered 19 cases.

In 2006, one case has already been registered by the special unit.

Several factors had contributed to the increase in the number of forged documents, R. Nataraj, Greater Chennai Police Commissioner, said. "The demand for land has increased significantly with the arrival of information technology companies."

The large number of educational institutions in the suburbs, easy availability of bank loans and improvement in infrastructure facilities such as transport, had added to the demand for land..

Modus operandi

CCB personnel had identified at least half a dozen methods adopted by such offenders, Mr. Nataraj said. Some of them: getting copies of a document from the property owner by posing as buyers.

If the landowner was not alive, forging the legal heir certificate. Some created power of attorney documents and then registered it with the Revenue Department and others forged documents for a piece of land, as though it was gifted to them.

Claiming ownership of a vacant piece of land, they created documents to show it had been sold to them by someone else and then sold it to genuine buyers. They also cheated financial institutions by mortgaging forged documents to obtain loans.

The CCB authorities said they had arrested 43 persons in land fraud cases in the past three years.

The value of the land ran into several crores of rupees, the police said.

Mr. Nataraj said a prospective buyer must avoid unregistered real estate businessmen and personally obtain the encumbrance certificate.

The buyer must verify the mother document, the sale deed and ascertain whether the land is `poromboke/natham poromboke' or Government land.

In the suburbs, the buyer should approach the Village Administrative Officer to confirm the ownership details.
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Some Frequently Asked Questions when buying a Flat or Apartment

Q: What are the documents to be verified before the purchase of a Flat?
A: Before you purchase a flat, you have to have a title and document search conducted by a competent advocate. It is a professional job to be done with professional assistance.

Q: What is the difference between built up area, super built up area, and carpet area?
A: Carpet Area : This is the area of the apartment/building which does not include the area of the walls. 
Built up Area : This includes the area of the walls also 
Super Built up Area : This includes the built up area along with the area under common spaces such as the lobby, lifts, stairs, etc. This term is therefore only applicable in the case of multi-dwelling units.

Q: What are all the important documents one should check before buying any property?
A: If you want to purchase a property, you have to look at the approved layout plan, approved building plan, ownership documents, carryout search, etc. Contact an advocate before you purchase a property so that he can advise you.

Q: In whose name is the stamps required to be purchased?
A: The stamps are required to be purchased in the name of any one of the executors to the Instrument.

Q: What is meant by the market value of the property and is Stamp Duty payable on the market value of the property or on consideration as stated in the agreement?
A: Market value means the price at which a property could be bought in the open market on the date of execution of such instrument. The Stamp Duty is payable on the agreement value of the property or the market value which ever is higher.

Q: Who is the appropriate authority for knowing the market value of the property?
A: The Sub-Registrar of the area, in whose jurisdiction the property is located, is the appropriate authority for knowing the market value of the property or the collector of the district.

Q: What exactly do we mean by a Freehold property (Plot or a Flat? What are the advantages and disadvantages, if any?
A: A freehold property (Plot or a Flat) is one where there is a whole and sole owner(s), ownership is full and unconditional (within the provisions of the laws of the land) and there is no lessor / lessee involved.

Q: How to verify the authenticity of the various documents submitted by the seller of the house, particularly with regard to the possibility that the house has not been sold earlier to a third party ?
A: Regarding authenticity of documents, again, you have to take the help of an advocate to verify.

Q: Upon buying a flat from a builder in a building under construction, what are the permissions and papers that one should check with the builder, so as to ascertain the genunity of the builder?
A: When you are buying a flat from a builder in a building under construction, you have to check the following:

  • Approved plan of the building along with the number of floors.
  • Ensure that the floor that you are buying is approved.
  • Check if the land on which the builder is building is his or he has undertaken an agreement with a landlord. If so, check the title of the land ownership with the help of an advocate.
  • Check the building byelaws as applicable in that area and ensure that the builder is building without any violation of front setback, side setbacks, height, etc.
  • Check specifications given in the agreement to sell of the sale brochure. Is he providing the same actually on the ground or not?
  • Check the reputation of the builder.
  • Ensure that urban land ceiling NOC (if applicable) has been obtained or not.
  • NOC from water and electricity authorities also have to be obtained.
  • NOC from lift authorities.
  • Mortgage free
  • Claim of any other ownerships
  • Any tax demand orders against property
  • Is property under any government scheme to be acquired
  • Note:  Apart from these mentioned points, still you need to take into consideration, the LEGAL ASPECT of the property is handled professionaly to ensure no problems in the future.

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Basic considerations when Buying a Home

Research Is the Key
Home sellers won't call you with an offer to buy a maintenance-free home with a wonderful mortgage. You have to find the gems yourself! Only by reading available materials, talking to friends and experts, and spending time looking at different homes, schools, and neighborhoods you will end up with your DREAM HOME.

Make a Plan
Every important decision needs to be clearly thought out. Developing a home buying plan can help you focus on the important factors and organize the entire process. You may even want to use a binder with sections on house hunting, home financing, service providers, etc. Loan pre-qualifying helps you determine the home price you can afford and presents you as a genuine prospect to the seller. A lender typically uses the 28% formula (your monthly mortgage can't exceed 28% of your monthly income) in approving your loan. Planning your actions and getting pre-qualified will keep you out of the panic mode and allow you to take advantage of opportunities. A thorough plan will save both time and money!

Value
The classic rule of buying the worst house in the best neighborhood still applies. If you buy with an eye towards improvement, you can customize the home to fit your needs. The saying, "make money buying a home, not selling one," should keep you focused on the long-term importance of the purchasing price.

Create A Top 10 List of Amenities
When shopping for a home, list the features (fireplace, fenced-in yard, new appliances, etc.) that are most important to you in deciding on which home to buy. Establishing "your criteria" early on will save time shopping for inappropriate homes, your top reason for buying a home should be the value you are getting.

Get A Quality Home Inspection
Although it is hard to believe, more people pay for inspections before buying used cars than when making the biggest investment of their lives -- their homes. Paying for a qualified home inspection before you buy a home isn't just spending "a little extra" for peace of mind; it's absolutely essential for anyone who doesn't want to spend thousands of rupees for repairs.

Legal Advise
Before buying property, it is advisable to appoint a solicitor to inspect the original title documents of the property being purchased. If the title is not clear, the number of complications arising in future may be numerous. For eg., no bank would provide a loan against a property not having a clear title, it may be difficult to transfer share certificate of the society in your name, selling of property will not be simple, etc.

LEGAL ISSUES :

Verification of the Title of the vendor

This is the most important aspect of a purchase transaction of an immovable property and may be competently handled by a reputed lawyer/solicitor/chartered accountant etc. The verification is necessary from following three angles:

i) Validity of Title: The vendor must have a clear, valid and marketable title over the immovable property which is the subject matter of transaction. This would require a close scrutiny of documents of title produced by the vendor. The document must be a registered document. 

ii) Obtaining of Non-encumbrances certificate from registrar and good title from the concerning tehsildar . 

iii ) acquisition of land in any scheme by the land acquisition officer.

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